Webb Company Owns 90% of Jones Company

question 11

Multiple Choice

Webb Company owns 90% of Jones Company. The original balances presented for Jones and Webb as of January 1, 2011 are as follows:

Assume Jones issues 20,000 new shares of its common stock for $15 per share. Of this total, Webb acquires 18,000 shares to maintain its 90% interest in Jones.

After acquiring the additional shares, what adjustment is needed for Webb's investment in Jones account?

• A) $270,000 increase.
• B) $270,000 decrease.
• C) $27,000 increase.
• D) $27,000 decrease.
• E) No adjustment is necessary.

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Definitions:

Hamstring Strain

An injury to one of the three hamstring muscles at the back of the thigh, often caused by overstretching.

Sore Muscles

Discomfort or pain in muscles after unusual or vigorous physical activity, often due to microtears in muscle fibers.

Stiff Muscles

A condition where muscles feel tight and restricted in movement, often resulting from exercise, injury, or stress.

High Intensity

Referring to activities or exercises that require a large amount of effort and result in rapid heart rate and increased respiration.